iag finance (new zealand) limited abn97 111 268 243 …€¦ · iag finance (new zealand) limited...

IAG FINANCE (NEW ZEALAND) LIMITED

ABN 97 111 268 243

HALF YEAR FINANCIAL REPORT 31 DECEMBER 2010

APPENDIX 4D

CONTENTS Page No

Results for announcement to the market 1Other information 2Appendix 4D compliance matrix 3Attachment A:Half year financial report 31 December 2010 5

RESULTS FOR ANNOUNCEMENT TO MARKET

Up / Down % Change $000

Revenue from ordinary activities Up %18.0 18,206

Profit/(loss) from ordinary activities after tax attributable to shareholders Down %98.5 320

Net profit/(loss) attributable to shareholders Down %98.5 320

RESET EXCHANGEABLE SECURITIES AMOUNT PER SECURITY FRANKED AMOUNT PERSECURITY

15/09/2010 payment $1.5718 $1.5718

15/12/2010 payment $1.5454 $1.5454

The next quarterly interest payment, which is expected to be $1.5715 per RES (6.3735% per annum), is due for payment on 15March 2011. This interest payment is expected to be fully franked.

This report is to be read in conjunction with the annual report of the IAG Finance (New Zealand) for the year ended 30 June 2010and any public announcements made by the Company since 30 June 2010 in accordance with the continuous disclosurerequirements of the Corporations Act 2001.

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OTHER INFORMATIONDuring the half year IAG FInance (New Zealand) Limited did not hold any interest in any joint venture.

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APPENDIX 4D COMPLIANCE MATRIX

APPENDIX 4D DISCLOSURE REQUIREMENTSIAG FINANCE (NEW ZEALAND) LIMITEDAPPENDIX 4D

PAGENUMBER

NOTENUMBER

1 Details of the reporting period and theprevious corresponding period

All financial data headings

2 Key information in relation to the following.This information must be identified as''Results for announcement to the market''.

''Results for announcement to the market'' page 1Appendix 4D

2.1 The amount and percentage change up ordown from the previous corresponding periodof revenue from ordinary activities.

2.2 The amount and percentage change up ordown from the previous corresponding periodof profit (loss) from ordinary activities aftertax attributable to members.

2.3 The amount and percentage change up ordown from the previous corresponding periodof net profit (loss) for the period attributableto members.

2.4 The amount per security and franked amountper security of final and interim dividends ora statement that it is not proposed to paydividends.

2.5 The record date for determining entitlementsto the dividends (if any).

2.6 A brief explanation of any figures in 2.1 to2.4 necessary to enable the figures to beunderstood.

3 Net tangible assets per security with thecomparative figure for the previouscorresponding period.

Attachment A: Half year financial report 31December 2010:Notes to the financial statements- Net tangible assets P.6 NOTE 7

4 Details of entities over which control hasbeen gained or lost during the period,including the following.

Not applicable

4.1 Name of the entity.

4.2 The date of the gain or loss of control.

4.3 Where material to an understanding of thereport – the contribution of such entities tothe reporting entity’s profit from ordinaryactivities during the period and the profit orloss of such entities during the whole of theprevious corresponding period.

5 Details of individual and total dividends ordistributions and dividend or distributionpayments. The details must include the dateon which each dividend or distribution ispayable and (if known) the amount persecurity of foreign sourced dividend ordistribution.

Attachment A: Half year financial report 31December 2010:Notes to the financial statements- Dividends note P.6 NOTE 4

6 Details of any dividend or distributionreinvestment plan in operation and the lastdate for the receipt of an election notice forparticipation in any dividend or distributionreinvestment plan.

Attachment A: Half year financial report 31December 2010:Notes to the financial statements- Dividends note P.6 NOTE 4

7 Details of associates and joint ventureentities including the name of the associateor joint venture entity and details of thereporting entity’s percentage holding in eachof these entities and - where material to anunderstanding of the report - aggregateshare of profits (losses) of these entities,details of contributions to net profit for eachof these entities, and with comparativefigures for each of these disclosures for theprevious corresponding period.

''Other information'' page 2 Appendix 4D

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APPENDIX 4D DISCLOSURE REQUIREMENTSIAG FINANCE (NEW ZEALAND) LIMITEDAPPENDIX 4D

PAGENUMBER

NOTENUMBER

8 For foreign entities, which set of accountingstandards is used in compiling the report(e.g. International Accounting Standards).

Not applicable

9 For all entities, if the accounts are subject toaudit dispute or qualification, a description ofthe dispute or qualification.

Not applicable

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ATTACHMENT A


HALF YEAR FINANCIAL REPORT - 31 DECEMBER 2010

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ABN 97 111 268 243

FINANCIAL REPORTFOR THE HALF YEAR ENDED 31 DECEMBER 2010


TABLE OF CONTENTS

Directors' Report................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1

Lead Auditor's Independence Declaration................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................2

Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................3

Directors' Declaration................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................7

Independent Auditor's Review Report................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................8


STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2010

NOTE 31 December2010

31 December2009

$000 $000

INTEREST REVENUE

Related bodies corporate 18,155 11,251

Other corporations 18 3

Total interest revenue 18,173 11,254

INTEREST EXPENSE

Reset exchangeable securities (17,321) (9,565)

Net interest income 852 1,689

Other income 33 4,178

Finance costs - (5,193)

Unrealised foreign exchange gains and (losses) (139) (43)

Realised foreign exchange gains and (losses) 10 (57)

Other administration expenses (241) (200)

Profit/(loss) before income tax 515 374

Income tax (expense)/credit 3 (195) 21,694

Profit/(loss) for the period 320 22,068

Total comprehensive income and (expense) for the period, net of tax 320 22,068

The above statement of comprehensive income should be read in conjunction with the notes to the financial statements.


BALANCE SHEET AS AT 31 DECEMBER 2010

NOTE 31 December2010

30 June2010

$000 $000

ASSETS

Cash held for operational purposes 2,187 1,654

Receivables from related bodies corporate 17,452 17,470

Current tax assets 11 205

Loans to related bodies corporate 6 551,711 551,576

Deferred tax assets 5 6

Total assets 571,366 570,911

LIABILITIES

Trade and other payables 50 41

Interest payable on reset exchangeable securities 1,633 1,503

Employee benefits provision 15 19

Reset exchangeable securities 550,000 550,000

Total liabilities 551,698 551,563

Net assets 19,668 19,348

EQUITY

Share capital -* -*

Retained earnings 19,668 19,348

Total equity 19,668 19,348

* The share capital is $1.00 and rounded to zero.

The above balance sheet should be read in conjunction with the notes to the financial statements.

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STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2010

SHARE CAPITALRETAINEDEARNINGS TOTAL EQUITY

$000 $000 $000

31 December 2010

Balance at the beginning of the financial period -* 19,348 19,348

Profit/(loss) for the period - 320 320

Balance at the end of the financial period - 19,668 19,668

31 December 2009

Balance at the beginning of the financial period -* 1,405 1,405

Profit/(loss) for the period - 22,068 22,068

Balance at the end of the financial period - 23,473 23,473

* The share capital is $1.00 and rounded to zero.

The above statement of changes in equity should be read in conjunction with the notes to the financial statements.


CASH FLOW STATEMENT FOR THE HALF YEAR ENDED 31 DECEMBER 2010

31 December2010

31 December2009

$000 $000

CASH FLOWS FROM OPERATING ACTIVITIES

Interest received 18,038 10,712

Interest and finance costs paid (17,191) (8,844)

Income taxes paid (9) (428)

Other operating receipts 51 4,301

Other operating payments (227) (112)

Net cash flows from operating activities 662 5,629

CASH FLOWS FROM INVESTING ACTIVITIES

Net cash flows from investing activities - -

CASH FLOWS FROM FINANCING ACTIVITIES

Dividends paid - (200)

Net cash flows from financing activities - (200)

Net movement in cash held 662 5,429

Effects of exchange rate changes on balances of cash held in foreign currencies (129) (363)

Cash and cash equivalents at the beginning of the financial period 1,654 297

Cash and cash equivalents at the end of the financial period 2,187 5,363

The above cash flow statement should be read in conjunction with the notes to the financial statements.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2010

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

IAG Finance (New Zealand) Limited (Company) is a company limited by shares, incorporated and domiciled in Australia. It has resetexchangeable securities publicly traded on the Australian Securities Exchange (ASX). Its registered office is Level 26, 388 GeorgeStreet, Sydney, NSW 2000, Australia and the principal place of business is Level 1 NZI Centre, 1 Fanshawe Street, Auckland, NewZealand.

The parent and the ultimate parent entity is Insurance Australia Group Limited (IAG), an entity incorporated in Australia and listed onthe ASX, which owns 100% of the share capital of the Company. IAG, together with its subsidiaries forms the IAG Group. As part of theIAG Group, the Company complies with a variety of policies and procedures developed by IAG for application by all entities in the IAGGroup where applicable.

This general purpose half year financial report was authorised by the board of directors for issue on 22 February 2011.

This half year financial report does not include all of the notes normally included in an annual financial report. Accordingly, this reportshould be read in conjunction with the annual report for the year ended 30 June 2010 and any public announcements made by IAGFinance (New Zealand) Limited since 30 June 2010 in accordance with the continuous disclosure requirements of the Corporations Act2001.

A. STATEMENT OF COMPLIANCE

This general purpose financial report has been prepared in accordance with the Corporations Act 2001, Australian AccountingStandard AASB 134 Interim Financial Reporting, the recognition and measurement requirements of other applicable AustralianAccounting Standards (including Australian interpretations) adopted by the Australian Accounting Standards Board (AASB) and the ASXListing Rules.

International Financial Reporting Standards (IFRS) refer to the overall framework of standards and pronouncements approved by theInternational Accounting Standards Board. IFRS forms the basis of the Australian Accounting Standards. This half year financial reportof the Company complies with IFRS.

B. BASIS OF PREPARATION OF THE FINANCIAL REPORT

The accounting policies adopted in the preparation of this financial report are the same as the previous year unless otherwise noted.These financial statements have been prepared on the basis of historical cost principles.

The presentation currency used for the preparation of this financial report is Australian dollars.

The balance sheet is prepared using the liquidity format in which the assets and liabilities are presented broadly in order of liquidity.

I. Australian accounting standards issued but not yet effective

As at the date of this financial report, there are a number of new and revised accounting standards published by the AustralianAccounting Standards Board for which the mandatory application dates fall after the current half year reporting period.

None of these standards have been early adopted and applied in the current reporting period. These standards will be adopted in theyear commencing 1 July after the operative date. For example, AASB 2009-11 will be operative in the financial year commencing 1 July2013.

TITLE DESCRIPTION OPERATIVE DATE NOTE

AASB 9 Financial Instruments 1 January 2013 A

AASB 2009-11 Amendments to Australian Accounting Standards - Accounting standardsarising from AASB 9

1 January 2013 A

AASB 2009-12 Amendments to Australian Accounting Standards 1 January 2011 B

AASB 2010-4 Further amendments to Australian Accounting Standards arising fromthe annual improvement project

1 January 2011 B

AASB 2010-5 Amendment to Australian Accounting Standards 1 January 2011 A

AASB 2010-6 Amendment to Australian Accounting Standards - Disclosures ontransfers of financial assets

1 July 2011 A

AASB 2010-7 Amendment to Australian Accounting Standards arising from AASB 9 1 January 2013 A

Table notes

A These changes are not expected to have a significant, if any, financial impact.

B These changes will only impact disclosures when preparing the annual financial report.

II. Changes in accounting policies

There have been no changes in accounting policies which have a material financial impact during the current half year reporting period.

III. Reclassifications of comparatives

No items have been reclassified from the Company's prior year financial report to conform to the current period’s presentation.

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IV. Rounding

Amounts in this financial report have been rounded to the nearest thousand dollars, unless otherwise stated. The Company is the kindof company referred to in the class order 98/100 dated 10 July 1998 issued by the Australian Securities & Investments Commission.All rounding has been conducted in accordance with that class order.

NOTE 2. SEGMENT REPORTING

The Company operates principally providing treasury services of the IAG's New Zealand operations including issuing RES inAustralia. RES are listed on the ASX.

The Company operates as a single segment and so the information presented in the financial statements represents thesegment reporting information.

NOTE 3. INCOME TAX

31 December2010

31 December2009

$000 $000A. INCOME TAX (CREDIT)/EXPENSE

Current tax 195 (21,694)

Income tax (credit)/expense 195 (21,694)

B. INCOME TAX RECONCILIATION

The income tax for the financial year differs from the amount calculated on the profit beforeincome tax. The differences are reconciled as follows:

Profit for the year before income tax 515 374

Income tax calculated at 30% (2009 - 30%) 155 112

Amounts which are not deductible/(taxable) in calculating taxable income

Foreign exchange losses not subject to income tax 41 -

Foreign exchange losses deductible on settlement of loan with a related body corporate - (21,797)

Other (1) (9)

Income tax (credit)/expense attributable to profit/(loss) for the period before and after impactof tax consolidation 195 (21,694)

NOTE 4. DIVIDENDS

No dividends were paid in, or declared in respect of, the half year to 31 December 2010 (31 December 2009 - $Nil).

There are presently no restrictions on the payment of dividends by the Company other than the payment of dividends generally beinglimited under the applicable Corporations Act 2001 and constitutional provisions.

NOTE 5. CONTINGENT LIABILITIES AND CONTINGENT ASSETS

There have been no material changes in the Company's contingent liabilities or contingent assets since 30 June 2010.

NOTE 6. RELATED PARTY DISCLOSURESA. CONTROLLING ENTITIES

The ultimate parent entity in the Consolidated entity is Insurance Australia Group Limited which is incorporated in Australia. There wereno transactions with the ultimate parent entity during the period (31 December 2009 - none).

The following is additional information provided in relation to the balance sheet impact on the loan to a related body corporate, IAG(NZ) Holdings Limited, which is denominated in Australian dollars. There has been no significant change in terms and conditions of theloan since 30 June 2010.

I. Balances outstanding at reporting date

Details of the loan to a related body corporate are as follows:

31 December2010

30 June2010

$000 $000

Loan to IAG (NZ) Holdings Limited * 551,711 551,576

* The balance as at reporting date included accrued interest of $1,711,000 (30 June 2010 - $1,576,000).

NOTE 7. NET TANGIBLE ASSETS

31 December2010

30 June2010

$000 $000

Net tangible assets per ordinary share 19,668 19,348

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